4th March 2024 > > WSJ & supply shock.

tl;dr

The WSJ might have cemented its place in the Rogues against Cryptos Gallery. It’s not just OTC desks that have run out of BTC.

Market Snap

Market Wrap

That looks like an Asian pump ahead of the ETF buying today, setting up a strong possibility of a new ATH today, or tomorrow at the latest. The reaction to that event will be very interesting indeed.

The only worrying aspect remains the elevated perpetual futures funding rates. Even the smallest correction – and that can happen for events external to cryptos – would likely lead to a very rapid, very painful long squeeze, which would itself correct very quickly but only after causing the maximum pain for the maximum number of people.

Curious Cryptos’ Commentary – Wall Street Journal

As if $65k on the trade sheet isn’t enough I have even more cheering news.

The WSJ is not known for its liberal outlook on life, and in particular it takes an approach common to many newspapers of its ilk towards cryptos. Some say there is a conspiracy involving Senator Elizabeth Warren, the SEC, Jamie “you can’t fire me” Dimon, and certain news outlets to try to kill the crypto revolution before it even gets started.

It isn’t a conspiracy because these actors are loud and proud of their innate illiberalism and undemocratic principles. Their worldview is a legitimate stance to take, though also deeply mistaken, bordering on the immoral. But they are entitled to state their arguments, and it is only fair to listen.

What cannot be allowed to happen is that misinformation and lies are perpetuated. Warren’s claims that cryptos are only used for illicit activities has been roundly trounced by the Fed itself. The SEC has famously been described as acting in an “arbitrary and capricious” manner by a judge, paving the way for approval of spot BTC ETFs. Dimon’s preposterous claim that if he was the government, he would ban cryptos simply demonstrates the depth of his ignorance, but also encourages others to believe that a ban might even be a possibility. Which, for the record, it isn’t.

Now the WSJ is being sued for defamation over an article in 2023:

https://www.wsj.com/finance/banking/crypto-companies-behind-tether-used-falsified-documents-and-shell-companies-to-get-bank-accounts-f798b0a5

It’s behind a paywall. The shocking thing about that is that anyone would part with hard-earned cash to this organisation, but each to their own.

The article accused certain individuals and companies of falsifying documents though shortly after publication several sections were quickly removed, suggesting a degree of factual inaccuracy borne of prejudice. Nonetheless, what was left was damning enough if true.

One of the companies – Tether – has been the subject of frequent criticism by the CCC for its lack of transparency regarding the details of its assets and liabilities. That is a valid concern, and is an appropriate topic to discuss, but the WSJ went much further in its accusations.

Now we will get to see in a court of law just how accurate the WSJ was in its reporting of forged documents, ghost companies, fake invoices, and non-existent contracts against Tether, Bitfinex, and specific individuals.

I know which side I am rooting for.

Curious Cryptos’ Commentary – The supply shock

On Saturday the CCC reported that the amount of BTC held by OTC desks has been almost exhausted, leaving the ETFs little choice but to funnel a lot of trades through the centralised cryptocurrency exchanges.

Now we see this:

Stocks of BTC and ETH on those CEXs are at multi-year lows. For BTC we are talking about 2mm coins. But not all those coins are for sales at today’s prices.

If we look at the top exchanges there is about $70-$80mm depth to a 2% rise in the market, a price around $66.5k. That depth is a mere 1,200 coins or so. As prices rise, that does attract more sellers, but it is clear to me – the supply shock is very much underway.